Combined benefits of fermentation! Fitch upgrades Shin Kong Life's rating, outlook to stable

Fitch Ratings upgraded Shin Kong Life's rating and outlook to stable.

[Reporter Wang Menglun/Taipei Report] Fitch Ratings announced the latest rating results for Shin Kong Life Insurance. The financial strength rating was raised from "BBB" to "BBB+", the long-term issuer default rating was raised from "BBB-" to "BBB", and the outlook was raised from "Rating Watch Developing" to "Stable." This rating upgrade is undoubtedly due to the fact that after the merger of Taishin Shin Kong Financial Holdings, through continuous optimization of governance and integration of group resources, Shin Kong Life's overall business structure, profitability and capital strength have been positively recognized by international credit rating agencies.

Fitch pointed out that this rating upgrade mainly reflects Shin Kong Life's improved post-merger earnings performance, strengthened company profile, and maintained moderate capital levels. Fitch expects that in the next 12 to 24 months, Shin Kong Life will continue to benefit from improved insurance service results, gradual accumulation of capital buffers, and improved operating synergies brought about by deeper integration with the group. It is obvious that after undergoing in-depth reform, Shin Kong Life's financial health and business performance have simultaneously achieved concrete results.

In terms of operating performance, thanks to business integration and channel complementarity, Shin Kong Life’s market position continues to improve. Fitch said that the merged Shin Kong Life will have more advantages than before in terms of operating scale, customer reach and bancassurance channel layout, and it can combine the group's resources to expand its customer base. In the first half of 2026, Shin Kong Life's total premium income has jumped to the third largest life insurance company in China, which means that the results of integration have gradually been reflected in business performance and will help increase the contribution of new contract business.

In terms of profit performance, under the IFRS 17 framework, Shin Kong Life's after-tax net profit in the first half of 2026 reached NT$22.5 billion, and the annualized return on shareholders' equity was approximately 11%; the new contract CSM reached NT$35.1 billion, and the end-of-period CSM balance further increased to NT$293.6 billion, becoming an important foundation to support core profits and stable profit distribution in the future.

In terms of capital and risk control, Fitch believes that Shin Kong Life has established a better buffer against exchange rate and financial market fluctuations through its continued accumulation of CSM and strong reserves for foreign exchange price changes. As of the end of the first half of 2026, the company's financial leverage ratio remained at a low level of 8%; under the new generation solvency (TIS) system, the capital adequacy ratio after incorporating transitional measures reached 128%, which is higher than the legal minimum requirements, indicating that the capital structure remains stable.

In addition to Fitch Ratings' upgrade of Shin Kong Life's rating, China Ratings also recently adjusted the outlook on Shin Kong Life's rating from "negative" to "stable."